This blog is about struggles for the control of corporations. For the most part, I'll focus on public corporations headquartered in the United States, issuing securities according to the rules stipulated by the SEC in Washington and (typically) governing their affairs by the laws and judicial decisions of the state of Delaware.
My own prejudices are ... well, I think I'll let you work them out as we proceed day to day.

Monday, December 21, 2009

Leaving London?

Real or threatened regulations or taxes in London have become sufficiently onerous that many in the financial community there are threatening to leave. Since "Galt's Gulch" is a fictitious place, the first destination of which they speak when they talk of leaving is Switzerland, which is European by geography but not by law.

Bloomberg has put out a story on some of the problems with the proposed flight to Switzerland, especially Geneva. There are all those quotidian non-novelistic details with which to deal, like a housing shortage there for example. There is also the question of office space. The Bloomberg report quotes Tim Dawson, who works in Geneva himself, saying: "There is more office space in Canary Wharf than in the whole of Switzerland."

Canary Wharf, BTW, is a large office/shopping development largely constructed in the 1990s, in East London, in an area of idled docks. At an early stage of development, in 1993, Canary Wharf's working population was only 7,000. By January 2000, that working population figure was 27,000. So although financial business can and did in that interval leave central London's famous "Square Mile" for a place about 3 miles as a crow flies to the east and south, to continue all the way to Geneva presents graver problems.

Clearly the Bloomberg reporter and Mr Dawson are right to make this point, it does not follow though that the government in London can continue to increase the burden of doing business there with impunity. People who work in the financial district of London (either the Square Mile or Canary Wharf!) come from a lot of places around the world. The financial centrality of London is preserved by these ex-pats. And where will most of them go if the burdens become too great? To no single place. Simply: home.